Can a lawyer who is also an agent for a title insurance company represent a public agency and place the agency's title insurance with that company?
NY State Bar Ethics Opinion 631: A title-insurer agent serving as counsel to a public agency
Short answer: The opinion concluded that a lawyer whose firm acts as agent for a title insurance company may also represent a County Resource Recovery Agency and procure the agency's title insurance from that company, provided both clients consent after full disclosure, the agency is credited the fees the lawyer receives from the title company, no actual conflict exists, and the conditions for a public entity's consent set in N.Y. State 629 are satisfied.
Disclaimer: This is an advisory ethics opinion. Advisory opinions are not binding; they interpret the New York State Bar Association's rules of professional conduct and are persuasive authority. This summary is for research purposes only and is not legal advice. Verify current rules before acting on any specific guidance.
About this page: The plain-English summary and Q&A below were written by Ezel based on the official opinion. We do not reproduce the opinion text on this page; follow the linked source for the official text, which controls.
Plain-English summary
A lawyer whose firm both represented a County Resource Recovery Agency, a public benefit corporation, and served as agent for a nationwide title insurance company asked whether she could procure the agency's required title policies from that company. She would disclose the firm's involvement with the title company, tell the agency the exact fee the firm would be paid by the company, and give the agency full credit for those fees, reducing its legal bill. Both the agency and the title company would consent.
The committee drew on N.Y. State 351 (1974) and N.Y. State 576 (1986), which permit a lawyer to act both as a title company's agent and as counsel in the same transaction if there is no conflict, both parties consent after full disclosure, and the client is credited the fees the lawyer receives from the title company or expressly consents to the lawyer retaining them. N.Y. State 576 added detailed conditions, including that the representation be legally proper, that the client be told the amount the lawyer receives and the possible availability of cheaper insurance, that the fee not be excessive in the aggregate, and that the lawyer satisfy DR 5-105(C)'s test that it is obvious he can adequately represent each interest. That test fails where title exceptions are negotiable, because the lawyer would in effect be negotiating with himself.
Because the inquirer represented that all the safeguards of N.Y. State 576 would be met and that the agency would get full fee credit, the committee concluded the lawyer could accept the public agency's consent. It applied N.Y. State 629's framework for a public entity's consent: the obviousness test of DR 5-105(C) must be met, the lawyer must be reasonably certain the entity is legally authorized to waive the conflict and that all legal prerequisites are satisfied, and the process granting consent must preclude any reasonable public perception that it was given inconsistently with the public trust. Abandoning the older rule that government cannot consent puts increased weight on the obviousness test and on the heightened sensitivity required when the client is a public body (Canon 9).
Currency note
This opinion was issued in 1992, under New York's former Code of Professional Responsibility, which New York replaced with the Rules of Professional Conduct in 2009. The conflict and third-party-compensation provisions cited here have since been recast in Rules 1.7 and 1.8. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.
Common questions
Q: Can a lawyer act as both a title company's agent and counsel for a party in the same deal?
A: Yes, under N.Y. State 351 and 576 as applied here, if there is no actual conflict, both parties consent after full disclosure, and the client is credited the fees the lawyer receives from the title company or expressly consents to the lawyer keeping them.
Q: Does it matter that the client is a public agency?
A: Yes. The committee applied N.Y. State 629's conditions for a public entity's consent: the obviousness test must be met, the lawyer must be reasonably certain the entity is legally authorized to consent, and the consent process must avoid any reasonable perception inconsistent with the public trust.
Q: When does the obviousness test fail?
A: When title exceptions are negotiable or the lawyer must negotiate differing interests, in effect negotiating with himself; in that situation the committee said consent cannot cure the conflict and the lawyer must withdraw.
Background and rules framework
The opinion interpreted DR 5-101 and DR 5-105(C) (conflicts and the obviousness test), DR 5-107 (compensation from one other than the client), and Canon 9 (avoiding the appearance of impropriety), as applied to a public-agency client. The closest Model Rule analogues are Rule 1.7 (concurrent conflicts) and Rule 1.8(f) (a lawyer accepting compensation from someone other than the client).
Citations and references
Rules of Professional Conduct:
- MR 1.7 (concurrent conflicts of interest)
- MR 1.8(f) (compensation from a third party)
- NY DR 5-101; DR 5-105(C); DR 5-107; Canon 9
Other opinions cited:
- N.Y. State 351 (1974): lawyer as title company agent and counsel in the same transaction
- N.Y. State 576 (1986): detailed conditions on such dual roles
- N.Y. State 629 (1992): conditions for a public entity's consent to a conflict
See also
- NY State Bar Op. 629: Conflicts among governmental entities
- NY State Bar Op. 630: A town's special counsel before the planning and zoning boards
- NY State Bar Op. 626: Real estate multiple representation and fees
Source
- Landing page: https://nysba.org/opinion-631/